There is a factor players keep citing that could be an obstacle to the New York Jets in free agency
By now, the details of the New York Jets‘ unsuccessful pursuit of Tyreek Hill last offseason are well-worn.
Hill chose Miami over the Jets due to money. It seems to start and end there, no matter how much Hill tried to pretend it was about preferring Tua Tagovailoa over Patrick Mahomes.
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However, an often-overlooked factor was stated by Hill himself when explaining why the Jets didn’t happen: “Just those state taxes, man.”
If your average person takes that into account when choosing where to live, shouldn’t it follow that those in the highest tax bracket would surely pay attention? The tax difference is far from insignificant.
As the 2023 free agency period approaches, this factor has increasingly been cited by players as a preference for their next destination. The Bills’ Jordan Poyer stated that he wanted a place that wouldn’t take half of his money in taxes. Derek Carr reportedly took that into consideration, and now linebacker David Long, a lesser-known free agent, has stated that he is also looking for a state with no taxes.
This leaves the Jets out of luck. They are New Jersey-based rather than New York, which leaves them with a 10.75% state tax for money earned above $5 million, the third-highest rate in the United States. Meanwhile, there are eight states with no income tax at all, and five of them host a total of eight NFL teams: Washington, Texas, Tennessee, Nevada, and Florida. (Wyoming, South Dakota, and Alaska are the other three.)
In a world with no salary cap, an owner would simply pay a player more money to offset the tax rate. However, in a hard-cap league, the state income tax leaves teams in high-tax states at a distinct disadvantage.
Mike Maccagnan already showed the detriments of paying a Jets tax to lure free agents with his outrageous contracts given to C.J. Mosley, Le’Veon Bell, Trumaine Johnson, and Avery Williamson, among others.
The NFL might want to take a look at this difference in their quest for parity. If the salary cap is meant to allow various teams a chance to win, they might stop to question why a New Jersey-based team has the longest playoff drought in the sport (and soon to be in the four major sports after the NBA’s Sacramento Kings break their own funk).
Certainly, the Jets have themselves to blame for their funk; misses at the quarterback position, poor coaching, lackluster drafting, and many other factors have led to their difficulties. But as they try to gear up for a playoff run, they may be held back by players’ desire to keep more of the pie.
While you cannot blame the players for wanting to keep their money, the salary cap-driven league should take a look at this and make some adjustments to account for the financial realities. This is outside a particular team’s cash flow issues and inability to put money in escrow (a la the Raiders and Bengals). This is the salary cap specifically discriminating against teams due to state law.
It can be argued that teams have attractive and less-attractive elements due to climate factors or a player’s hometown, as well, and this is just another element that cannot be accounted for. However, because the salary cap directly impedes a team’s ability to attract a free agent for external reasons, the NFL might want to consider factoring that into the salary cap.
It would be difficult to actually count the player’s take-home pay against the salary cap because take-home pay is complicated enough for an accountant who has all the paperwork in front of him. However, with more and more players citing this as a factor in their free agency calculus, it’s fair to wonder if this upsets the competitive balance of the game.
Until then, the Jets will be riding at a deficit, particularly against their divisional rival, the Miami Dolphins.
Isn’t it like 12% in California for the top tax bracket?
To blame the Jets failures on the tax rate is suuuuuuch a stretch. If you’re going to mention Hill, you should always add that he’s a guy who pled guilty to punching his 8-week pregnant girlfriend in the face and stomach. I’d rather lose with guy I can respect than win with a rat like him.
He made that comment about keeping his money on the same week that tens of thousands of people saw their homes destroyed by a hurricane. He’s just a complete prick. The media would have crucified the Jets had they gotten him.
This is one issue that I’ve noticed too but isn’t talked about much.
Not saying that the Jets’ failures as a team are only due to the higher tax bracket, but it does seem to put them at a significant financial disadvantage compared to other teams.
It almost seems like a Catch-22. If the Jets want FAs, they have to overpay b/c of the taxes but because they overpay they are unable to get as many FAs or even retain their own players b/c their salary cap is filled up quicker. So, the Jets are almost forced to rely heavily on the draft to provide players as a reasonable rate so they can afford FAs as well.
I think your article is spot on that this does seem to be an unbalance in the parity that the NFL claims to value so much. Ultimately, this forces the a team like the Jets to be near perfect in the draft so that FAs will be willing to come and play for the team even with the tax disadvantage.
But, I also think this makes it harder for the Jets to get FAs especially when they are a bad team. B/c if you are a bad team, you have to overpay for FAs and for the Jets, you’d have to really overpay and that can leave the Jets as a continual bad team if FAs don’t go their way (which has happened before) and they miss in the draft.
I’ve been saying for a year now that the “no tax” States have an unfair advantage.
Tampa is zero, LA is about 9%. Using a formula derived from the taxes in all the states the NFL plays in, the cap should be adjusted for the higher tax teams so they can offer the same net income as Florida and Texas.
Sorry, Rivka, this one is a miss. Those states with no income tax have won just ONE SB over the past 30 years or so. Meanwhile, the Giants, who have the same tax burden as the Jets, have won 4. Buffalo has a higher tax burden, and terrible weather, yet has consistently outperformed the Jets. Massachusetts tax rates aren’t great and they won a ton of SBs.
That would be why I wrote “increasing.” It seems to be a recent phenomenon.
Additionally, if you’re using the Super Bowl as a barometer for whether something is a factor in winning or not, you’re excluding an awful lot of important factors in football.